OLB GROUP, INC. - Quarter Report: 2008 June (Form 10-Q)
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
10-Q
Quarterly
Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act Of
1934
For
The Quarterly Period Ended June 30, 2008
Commission
File Number: 0-52994
THE
OLB GROUP, INC.
(Exact
name of registrant as specified in its charter)
|
Delaware
|
13-4188568
|
|
|
(State
of jurisdiction of Incorporation)
|
(I.R.S.
Employer Identification No.)
|
|
|
1120
Avenue of the Americas, Fourth Floor
New
York, NY
|
10036
|
|
|
(Address
of Principal Executive Offices)
|
(Zip
Code)
|
(212)
278-0900
(Registrant's
telephone number)
Not
Applicable
(Former
name, address and fiscal year, if changed since last report)
Indicate
by check mark whether the registrant (1) has filed all reports required to
be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports) and (2) has been subject to such filing requirements
for
the past 90 days.
Yes
x
No
¨
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes
¨
No
x
As
of June 30, 2008, the Company had a total of 44,282,832 shares
of Common Stock outstanding.
The
OLB Group, Inc.
FINANCIAL
STATEMENTS
June
30,
2008 and December 31, 2007
CONTENTS
|
Balance
Sheets
|
3
|
|
Statements
of Operations
|
4
|
|
Statement
of Stockholders’ Equity (Deficit)
|
5
|
|
Statements
of Cash Flows
|
6
|
|
Notes
to the Financial Statements
|
7
|
The
OLB Group, Inc.
Balance
Sheets
|
Balance
Sheets
|
||||
|
ASSETS
|
|
June
30,
|
|
December
31,
|
|
||||
|
|
|
2008
|
|
2007
|
|||
|
CURRENT
ASSETS
|
(Unaudited)
|
||||||
|
Cash
|
$
|
311
|
$
|
2,333
|
|||
|
Prepaid
expenses
|
63,332
|
95,833
|
|||||
|
Total
Current Assets
|
63,643
|
98,166
|
|||||
|
OTHER
ASSETS
|
|||||||
|
Internet
domain
|
4,965
|
4,965
|
|||||
|
TOTAL
ASSETS
|
$
|
68,608
|
$
|
103,131
|
|||
|
CURRENT
LIABILITIES
|
|||||||
|
Accounts
payable and accrued expenses
|
$
|
167,319
|
$
|
186,527
|
|||
|
Loan
payable - officer
|
48,131
|
-
|
|||||
|
Accrued
salary
|
68,750
|
-
|
|||||
|
Judgment
payable with accrued interest
|
177,245
|
172,627
|
|||||
|
Total
Current Liabilities
|
461,445
|
359,154
|
|||||
|
TOTAL
LIABILITIES
|
461,445
|
359,154
|
|||||
|
STOCKHOLDERS’
EQUITY (DEFICIT)
|
|||||||
|
Preferred
stock, $0.01 par value, 50,000,000 shares authorized,
|
|||||||
|
no
shares outstanding
|
-
|
-
|
|||||
|
Common
stock, $0.01 par value; 200,000,000 shares authorized,
|
-
|
||||||
|
44,282,832
and 43,691,067shares issued and outstanding, respectively
|
442,830
|
436,912
|
|||||
|
Additional
paid-in capital
|
10,473,321
|
10,370,639
|
|||||
|
Accumulated
deficit
|
(11,308,988
|
)
|
(11,063,574
|
)
|
|||
|
Total
Stockholders’ Equity (Deficit)
|
(392,837
|
)
|
(256,023
|
)
|
|||
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
$
|
68,609
|
$
|
103,131
|
|||
The
accompanying notes are an integral part of these financial
statements.
-3-
The
OLB Group, Inc.
|
Statements
of Operations
|
||||||||
|
(Unaudited)
|
|
For
the Six Months Ended
|
|
For
the Three Months Ended
|
|
||||||||||
|
|
|
June
30,
|
|
June
30,
|
|
||||||||
|
|
|
2008
|
|
2007
|
|
2008
|
|
2007
|
|||||
|
NET
REVENUES
|
$
|
-
|
$
|
-
|
$
|
-
|
$
|
-
|
|||||
|
OPERATING
EXPENSES
|
|||||||||||||
|
Officer
salary
|
131,250
|
124,730
|
68,750
|
62,430
|
|||||||||
|
General
and administrative
|
110,676
|
1,067,715
|
36,515
|
148,489
|
|||||||||
|
Loss
from operations
|
(241,926
|
)
|
(1,192,445
|
)
|
(105,265
|
)
|
(210,919
|
)
|
|||||
|
OTHER
INCOME (EXPENSE)
|
|||||||||||||
|
Interest
expense
|
(3,488
|
)
|
(3,488
|
)
|
(1,744
|
)
|
(1,744
|
)
|
|||||
|
Total
Other Income / Expense
|
(3,488
|
)
|
(3,488
|
)
|
(1,744
|
)
|
(1,744
|
)
|
|||||
|
NET
LOSS
|
(245,414
|
)
|
(1,195,933
|
)
|
(107,009
|
)
|
(212,663
|
)
|
|||||
|
BASIC
LOSS PER SHARE
|
$
|
(0.01
|
)
|
$
|
(0.03
|
)
|
$
|
(0.00
|
)
|
$
|
(0.01
|
)
|
|
|
BASIC
WEIGHTED AVERAGE SHARES
|
44,036,950
|
33,617,508
|
44,282,832
|
40,114,490
|
|||||||||
The
accompanying notes are an integral part of these financial
statements.
-4-
The
OLB Group, Inc.
Statements
of Shareholders’ Equity (Deficit)
|
Common
Stock
|
|
Additional
|
|
|
|
||||||||
|
|
|
|
|
|
|
Paid
In
|
|
Accumulated
|
|
||||
|
|
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit
|
|||||
|
Balance
at, December 31, 2006
|
35,300,506
|
$
|
353,006
|
$
|
8,592,018
|
$
|
(9,385,744
|
)
|
|||||
|
Issuance
of common stock for cash
|
44,000
|
440
|
10,560
|
-
|
|||||||||
|
Issuance
of common stock
|
|||||||||||||
|
to
convert accrued salaries and loans to equity
|
2,060,534
|
20,605
|
263,965
|
-
|
|||||||||
|
Issuance
of common stock for services
|
6,195,027
|
61,951
|
1,486,806
|
-
|
|||||||||
|
Issuance
of common stock to convert warrants to equity
|
91,000
|
910
|
17,290
|
-
|
|||||||||
|
Net
Loss for the year ended December 31, 2007
|
-
|
-
|
-
|
(1,677,830
|
)
|
||||||||
|
Balance
at, December 31, 2007
|
43,691,067
|
436,912
|
10,370,639
|
(11,063,574
|
)
|
||||||||
|
Issuance
of common stock for services (unaudited)
|
100,000
|
1,000
|
24,000
|
||||||||||
|
Issuance
of common stock
|
|||||||||||||
|
to
convert accrued salaries and loans to equity (unaudited)
|
491,765
|
4,918
|
78,682
|
||||||||||
|
Net
Loss for the 6 months Ended June 30, 2008 (unaudited)
|
-
|
-
|
-
|
(245,414
|
)
|
||||||||
|
Balance
at, June 30, 2008 (unaudited)
|
44,282,832
|
$
|
442,830
|
$
|
10,473,321
|
$
|
(11,308,988
|
)
|
|||||
The
accompanying notes are an integral part of these financial
statements.
-5-
The
OLB Group, Inc.
Statements
of Cash Flows
(Unaudited)
|
For
the Six Months Ended
|
|||||||
|
|
June
30,
|
||||||
|
|
2008
|
2007
|
|||||
|
CASH
FLOWS FROM OPERATING ACTIVITIES
|
|||||||
|
Net
loss
|
$
|
(245,414
|
)
|
$
|
(1,195,933
|
)
|
|
|
Adjustments
to reconcile net loss to net cash (used in)
|
|||||||
|
operating
activities
|
|||||||
|
Stock
for services
|
25,000
|
1,086,257
|
|||||
|
Changes
in assets and liabilities:
|
|||||||
|
(Increase)
decrease in prepaid assets
|
32,501
|
(50,000
|
)
|
||||
|
Increase
in accounts payable and accrued expense
|
116,661
|
137,117
|
|||||
|
Net
Cash (Used in) Operating Activities
|
(71,252
|
)
|
(22,559
|
)
|
|||
|
CASH
FLOWS FROM INVESTING ACTIVITIES
|
-
|
-
|
|||||
|
CASH
FLOWS FROM FINANCING ACTIVITIES
|
|||||||
|
Increase
(decrease) in cash overdraft
|
-
|
(2,920
|
)
|
||||
|
Repayment
of loan- officer
|
(5,500
|
)
|
(4,500
|
)
|
|||
|
Proceeds
from loan - officer
|
74,730
|
19,779
|
|||||
|
Proceeds
from sale of common stock
|
-
|
11,000
|
|||||
|
Net
cash provided by financing activities
|
69,230
|
23,359
|
|||||
|
NET
CHANGE IN CASH
|
(2,022
|
)
|
800
|
||||
|
CASH
– BEGINNING OF PERIOD
|
2,333
|
200
|
|||||
|
CASH
– END OF PERIOD
|
$
|
311
|
$
|
1,000
|
|||
|
CASH
PAID FOR
|
|||||||
|
Interest
|
$
|
-
|
$
|
-
|
|||
|
Taxes
|
$
|
-
|
$
|
300
|
|||
|
SUPPLEMENTAL
DISCLOSURE OF NON-CASH ACTIVITIES
|
|||||||
|
Stock
issued in conversion of accrued expenses & other debt
|
$
|
83,600
|
$
|
140,279
|
|||
|
Stock
for services
|
$
|
25,000
|
$
|
1,086,257
|
|||
The
accompanying notes are an integral part of these financial
statements.
-6-
The
OLB Group, Inc.
Notes
to
the Financial Statements
June
30,
2008 and December 31, 2007
NOTE
1 - BACKGROUND
The
unaudited financial statements have been prepared by The OLB Group, Inc. (the
“Company”), pursuant to the rules and regulations of the Securities and Exchange
Commission. The information furnished herein reflects all adjustments
(consisting of normal recurring accruals and adjustments), which are, in the
opinion of management; necessary to fairly present the operating results for
the
respective periods. Certain information and footnote disclosures normally
present in annual financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been omitted
pursuant to such rules and regulations. These financial statements should be
read in conjunction with the audited financial statements and footnotes for
the
year ended December 31, 2007 included on the Company’s Form 10-KSB. The results
of the six months ended June 30, 2008 are not necessarily indicative of the
results to be expected for the full year ending December 31, 2008.
NOTE
2 - SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES
Cash
and Cash Equivalents
The
Company considers all highly liquid investments purchased with an original
maturity date of three months or less from the date of purchase to be a cash
equivalent.
Concentration
of Credit Risk
Financial
instruments, which potentially subject the Company to concentration of credit
risk, consist of accounts receivable and cash deposits. The Company maintains
cash with various major financial institutions. The Company performs periodic
evaluations of the relative credit standing of these institutions. To reduce
risk, the Company performs credit evaluations of its customers and maintains
reserves for potential credit losses.
Use
of Estimates
The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates
Income
Taxes
In
July
2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation
No. 48, Deferred income taxes are provided using the liability method whereby
deferred tax assets are recognized for deductible temporary differences and
operating loss and tax credit carry forwards and deferred tax liabilities are
recognized for taxable temporary differences. Temporary differences are the
differences between the reported amounts of assets and liabilities and their
tax
bases. Deferred tax assets are reduced by a valuation allowance when, in the
opinion of management, it is more likely than not that some portion or all
of
the deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of the changes in tax laws and rates
of
the date of enactment.
-7-
The
OLB Group, Inc.
Notes
to
the Financial Statements
June
30,
2008 and December 31, 2007
Recent
Accounting Pronouncements
FASB
159 - Fair Value Option for Financial Assets and Financial
Liabilities
FASB
141
(revised 2007) Business combinations
FASB
162,
“The Hierarchy of Generally Accepted Accounting Principles” (FAS 162).
The
adoption of the above pronouncements is not expected to have a material impact
on our financial condition or results of operations.
-8-
NOTE
3 - RELATED
PARTY TRANSACTIONS
In
February 2004, the Company entered into an employment agreement with its founder
and President that expires on February 28, 2009.
The
agreement provides for an annual salary of $250,000 plus fringe benefits and
an
incentive bonus based on the achievement of certain performance criteria.
During
2007 the company converted $284,570 of accrued salary and loans owed to the
Company’s President into 2,060,534 shares of common stock.
During
the first three months of 2008 the company converted $83,600 of accrued salaries
and loans into 491,765 shares of common stock.
On
February 20, 2008 the company extended the employment agreement with its founder
and president for another 5 years commencing April 1, 2008 that expires on
February 28, 2014. The agreement provides for an annual salary of $275,000
plus
fringe benefits and an incentive bonus based on the achievement of certain
performance criteria. The employment agreement also includes a covenant not
to
compete with the Company for a period of one (1) year after employment ceases
as
to the renewal of this agreement.
NOTE
4 - GOING
CONCERN
The
financial statements are presented on the basis that the Company is a going
concern. A going concern contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business over a reasonable
length of time. The Company has incurred significant losses from operations,
and
has a working capital deficit of approximately $397,802 which together raise
substantial doubt about its ability to continue as a going concern. Management
is presently pursuing financing and investment opportunities with investment
bankers and private investors. The ability of the Company to achieve its
operating goals and to obtain such additional finances, however, is uncertain.
The financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that might result from the outcome of this
uncertainty.
-9-
Forward-Looking Statements
The
information in this report contains forward-looking statements. All statements
other than statements of historical fact made in report are forward looking.
In
particular, the statements herein regarding industry prospects and future
results of operations or financial position are forward-looking statements.
These forward-looking statements can be identified by the use of words such
as
“believes,” “estimates,” “could,” “possibly,” “probably,” anticipates,”
“projects,” “expects,” “may,” “will,” or “should” or other variations or similar
words. No assurances can be given that the future results anticipated by
the
forward-looking statements will be achieved. Forward-looking statements reflect
management’s current expectations and are inherently uncertain. Our actual
results may differ significantly from management’s expectations.
The
following discussion and analysis should be read in conjunction with our
financial statements, included herewith. This discussion should not be construed
to imply that the results discussed herein will necessarily continue into
the
future, or that any conclusion reached herein will necessarily be indicative
of
actual operating results in the future. Such discussion represents only the
best
present assessment of our management.
Critical
Accounting Policies
Our
discussion and analysis of our financial condition and results of operations
are
based upon our financial statements, which have been prepared in accordance
with
generally accepted accounting principles in the United States. The preparation
of financial statements require management to make estimates and disclosures
on
the date of the financial statements. On an on-going basis, we evaluate our
estimates including, but not limited to, those related to revenue recognition.
We use authoritative pronouncements, historical experience and other assumptions
as the basis for making judgments. Actual results could differ from those
estimates. We believe that the following critical accounting policies affect
our
more significant judgments and estimates in the preparation of our financial
statements.
Revenue
Recognition.
The
Company has had no revenues from operations since inception. Revenues will
be
recognized when title and risk of loss transfers to the customer and the
earnings process is complete. In general, title passes to our customers upon
the
customer's receipt of the merchandise. Revenue is accounted for in accordance
with Emerging Issue Task Force Issue No. 99-19, reporting revenue gross as
a
principal versus net as an agent. Revenue is recognized on a gross basis
since
our company has the risks and rewards of ownership, latitude in selection
of
vendors and pricing, and bears all credit risk. Our company records all shipping
and handling fees billed to customers as revenues, and related costs as cost
of
goods sold, when incurred, in accordance with Emerging Issue Task Force Issue
No. 00-10, accounting for shipping and handling fees and costs.
Allowance
for Doubtful Accounts.
Currently
we have no accounts receivable. We are required to make judgments based on
historical experience and future expectations, as to the realizability of
our
accounts receivable. We make these assessments based on the following factors:
(a) historical experience, (b) customer concentrations, customer credit
worthiness, (d) current economic conditions, and (e) changes in customer
payment
terms.
Overview.
We
are
e-commerce service provider, which enables a business desiring to sell goods
and
services on the internet to utilize the our e-commerce resources and support
services, thus creating economies of scale and cost efficiencies for e-commerce
sellers throughout the entire e-commerce process.
-10-
The
products that we plan to distribute over the next year and will account for
most
of our business are as follows:
|
|
·
|
ShopFast
PC
|
|
|
·
|
ShopFast
DSD
|
There
are
a number of trends in the eCommerce/direct response marketing industry, the
most
significant of which is the trend toward integrated marketing strategies.
Integrated marketing campaigns involve not only advertising, but also sales
promotions, internal communications, public relations, social networking,
and
other disciplines. The objectives of integrated marketing are to promote
our
products and services,
Price
is
no longer the sole motivator of purchasing behavior for our potential customers.
With the availability of similar products from multiple sources, customers
are
increasingly looking for distributors who provide a tangible value-added
to
their products. As a result, we provide a broad range of products and related
services. Specifically, we will provide research and consultancy services,
artwork and design services, and fulfillment services to our customers. These
services will be provided in-house as well as outsourced by our current
suppliers.
We
can
provide no assurances that our expectations described above will be
realized.
Recently
Issued Accounting Pronouncements.
During
the year ended December 31, 2007 and in 2008, the Company adopted the following
accounting pronouncements which had no impact on the financial statements
or
results of operations:
FASB
159 - Fair Value Option for Financial Assets and Financial
Liabilities
FASB
141
(revised 2007) Business combinations
FASB
162,
“The Hierarchy of Generally Accepted Accounting Principles” (FAS 162).
The
adoption of the above pronouncements is not expected to have a material impact
on our financial condition or results of operations.
Liquidity
and Capital Resources.
We
anticipate that our future liquidity requirements will require a need to
obtain
additional financing. The Company’s primary sources of funding to date consists
of loans from its Chief Executive Officer and principal stockholder, Ronny
Yakov. Although Mr., Yakov has provided financing in the past, he has no
binding
commitment to continue such financing. We may not be able to obtain such
additional financing or, if obtained, such financing may not be available
and/or
not be on terms favorable to us.
PLAN
OF OPERATION.
Our
plan
of operation is to launch the marketing of the software component of our
ShopFast PC product by the end of the forth quarter of fiscal 2008, to produce
a
30 minute infomercial to promote this product, as well as short form two
minute
commercials after completing the longer infomercial, depending on the funds
available to the Company for such purposes. We intend to run the advertisements
for a period of time and to use focus groups to determine the prices at which
we
can obtain the highest level of reseller orders and
then
to launch a full scale media campaign. If the ratio of media spending to
product
orders is at least $1.50 return in orders on $1.00 spent on advertising,
we
would continue such advertising. Otherwise, we would consider alternatives
to
the advertising methods tried. After adjustments to the marketing plan and
getting a satisfactory return rate on the media expenditures, we intend to
launch a nationwide television distribution campaign.
-11-
Over
the
next twelve months, we do not expect to purchase or sell any significant
equipment. We are currently redesigning ShopFast PC so that the Internet
Storefront can be created by a client having limited computer expertise without
our assistance. In previous versions of ShopFast DSD, the Internet Storefront
would have had to have been created by an administrator employed by us. We
are
redesigning ShopFast PC so that the client can create the Internet Storefront
on
the client’s own, in the following five steps:
Step
1:
Choose
the categories of items to be sold on the store.
Step
2:
Design
the store by choosing layouts, fonts, colors and a logo.
Step
3:
Personalize the store by adding descriptive text
Step
4:
Account
information to facilitate payments for the store subscription as well as
payment
of commissions
Step
5:
Final
store confirmation and immediate store generation.
If
we
successfully test our ShopFast PC product, we are planning to develop or
acquire
additional products to complement our e-commerce products. We anticipate
that we will also need to make expenditures in the following areas: to expand
our existing ecommerce platform and replace some of the existing hardware
and
servers to service the volume of transactions we anticipate and to add more
marketing and administrative personnel, although our initial plan is outsource
significant services to third party providers. The additional products to
be
developed and/or acquired have not yet been identified, but are expected
to be
the result of requests by clients and/or their customers for additional
functionality, services, payment methods and/or product
availability.
We
are
currently in the quality assurance testing phase for our re-developed ShopFast
DSD software, which is based on a different design platform than the prior
versions, allowing it to operate faster and under all computer operating
systems
that can fully support Internet Explorer 5.0 or higher. ShopFast DSD will
have
be a customized product to the needs of the particular clients. The immediately
prior paragraph is also applicable to the successful testing of our re-developed
ShopFast DSD product.
MANAGEMENT’S
DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
Some
of
the information in this prospectus contains forward-looking statements that
involve substantial risks and uncertainties. You can identify these statements
by forward-looking words such as "may," "expect," "anticipate," "believe,"
"estimate" and "continue," or similar words. You should read statements that
contain these words carefully because they:
|
·
|
discuss
our future expectations;
|
|
·
|
contain
projections of our future results of operations or of our financial
condition; and
|
|
·
|
state
other "forward-looking" information.
|
We
believe it is important to communicate our expectations. However, there may
be
events in the future that we are not able to accurately predict or over which
we
have no control. Our actual results and the timing of certain events could
differ materially from those anticipated in these forward-looking statements
as
a result of certain factors, including those set forth under "Risk Factors,"
"Business" and elsewhere in this prospectus. See "Risk Factors."
-12-
OVERVIEW
We
are an
e-commerce service provider engaged in the development of software products
and
other services designed to help businesses sell products over the internet.
We
are currently developing two software products: ShopFast
Direct Shopping Database™
(“ShopFast DSD”), and ShopFast
Profit Center™
(“ShopFast PC”). Each of these software products enables the user of the
software to create an internet website from which such user can sell products
located on a database maintained by us (the “OLB Database”).
RESULTS
OF OPERATIONS - SIX
MONTHS ENDED JUNE 30, 2008 AS COMPARED TO SIX MONTHS ENDED JUNE 30,
2007
GENERAL
AND ADMINISTRATIVE EXPENSES
General
and administrative ("G&A") expenses decreased by $957,039 or 90%
to $110,676 for the six months ended June 30, 2008 as compared to the six
months
ended June
30,
2007.
For the three months ended June 30, 2008 as compared to the three months
ended
June 30, 2007 expenses decreased by $111,974 or 75% to $36,515 this decrease
in
G&A expenses was the result of a decrease in professional fees and services
for the software development.
NET
LOSS
Net
loss
decreased by $950,520 to $245,413 for the six months ended June 30, 2008
as
compared to six months ended June 30, 2007. Net
loss decreased by $105,654 to $107,009 for the three months ended June 30,
2008
as compared to three months ended June 30, 2007.
This
decrease in net loss was the result of the decrease in G&A expenses for
professional fees & software development.
During
the
six
months ended June 30, 2008,
the
Company used $71,252 of cash for operating activities, as compared to $22,559
cash used through six months ended June 30, 2007. The increase in the use
of
cash was for operating expenses and professional services related to public
company compliance.
Cash
provided from financing activities during the six months ended June 30, 2008
was
$69,230 as compared to $23,359 through six months ended June 30, 2007. Our
capital needs have primarily been met from the loans from our
president.
Our
financial statements as of the six months ended June 30, 2008 have been prepared
under the assumption that we will continue as a going concern through December
31, 2008. Our independent registered public accounting firm has issued their
report that included an explanatory paragraph expressing substantial doubt
in
our ability to continue as a going concern without additional capital becoming
available. Our ability to continue as a going concern ultimately is dependent
on
our ability to generate a profit which is dependent upon our ability to obtain
additional equity or debt financing, attain further operating efficiencies
and,
ultimately, to achieve profitable operations. The financial statements do
not
include any adjustments that might result from the outcome of this uncertainty.
-13-
PLAN
OF OPERATION AND FINANCING NEEDS
We
are
engaged in developing eCommerce software.
Our
plan
of operation within the next twelve months is to utilize our cash balances
to
continue research and development of our software. We believe that
our current cash and investment balances will be sufficient to support
development activity and general and administrative expenses for the next
twelve
months. Management estimates that it will require additional cash resources
during 2008, based upon its current operating plan and condition. We will
be
investigating additional financing alternatives, including equity and/or
debt
financing. There is no assurance that capital in any form would be available
to
us, and if available, on terms and conditions that are acceptable. If we
are
unable to obtain sufficient funds during the next twelve months, we may be
forced to reduce the size of our organization, which could have a material
adverse impact on, or cause us to curtail and/or cease the development of
our
products.
-14-
| ITEM 3. |
CONTROLS
AND PROCEDURES
|
Prior
to
the filing of our Form 10-QSB for the second quarter of 2008, our management
intends to complete an evaluation of the effectiveness of the design,
maintenance and operation of our disclosure controls and procedures and to
implement any corrective actions. We intend to maintain disclosure controls
and
procedures that are designed to ensure that information required to be disclosed
in our Exchange Act reports is recorded, processed, summarized and reported
within the time periods specified in the Securities an Exchange Commission’s
rules and forms, and that such information is accumulated and communicated
to
our management, including its chief executive officer as appropriate, to
allow
timely decisions regarding required disclosure based closely on the definition
of “disclosure controls and procedures” in Rule 13a-15(e).
In
designing and evaluating the disclosure controls and procedures, management
recognizes that any controls and procedures, no matter how well designed
and
operated, can provide only reasonable assurance of achieving the desired
control
objectives, and management necessarily is required to apply its judgment
in
evaluating the cost-benefit relationship of possible controls and procedures.
We
are
aware of the following material weaknesses in internal control that could
adversely affect the Company’s ability to record, process, summarize and report
financial date:
Due
to
the size of the Company there is a lack of adequate personnel and the expertise
that is required to (1) prepare an accurate analysis of cash flows and
ultimately the Statement of Cash Flows included in the financial statements,
(2)
properly account for stock for service transactions and (3) properly prepare
the
cash reconciliation.
In
addition, the Company has a material weakness in the adequacy of its ability
to
complete notes to the financial statements.
This
quarterly report does not include a report of management’s assessment regarding
internal control over financial reporting or an attestation report of the
Company’s registered public accounting firm due to a transition period
established by rules of the Securities and Exchange Commission for new public
companies.
-15-
PART
II. OTHER INFORMATION
| ITEM 1. |
LEGAL
PROCEEDINGS:
|
As
of the
filing date of this Form 10-Q, we are not a party to any pending legal
proceedings.
| ITEM 2. |
CHANGES
IN SECURITIES.
|
(a) For
the
three months ended June 30, 2008 there were no sales of unregistered
securities.
-16-
| ITEM 3. |
DEFAULTS
UPON SENIOR SECURITIES
|
Not
applicable.
| ITEM 4. |
SUBMISSIONS
OF MATTERS TO A VOTE OF SECURITY
HOLDERS:
|
Not
applicable.
| ITEM 5. |
OTHER
INFORMATION:
|
Not applicable
| ITEM 6. |
EXHIBITS:
|
Except
for the exhibits listed below as filed herewith or unless otherwise noted,
all
other required exhibits have been previously filed with the Securities and
Exchange Commission under the Securities Exchange Act of 1934 on Form 10-SB,
as
amended (file no.0-52994).
|
Exhibit
Number
|
Description
|
|
|
2.1
|
|
Certificate
of Incorporation
|
|
2.2
|
Bylaws
|
|
|
2.3
|
Certificate
of Merger between The OLB Group, Inc. and OLB.com (On-Line
Business)
|
|
|
3.1
|
Common
Stock Certificate
|
|
|
3.2
|
Warrant
Agreement, issued by The OLB Group, Inc. to Ronny Yakov
|
|
|
10.1
|
Employment
Agreement effective March 1, 2004 between The OLB Group, Inc. and
Ronny
Yakov
|
|
|
10.2
|
Fulfillment
and Distribution Agreement, dated January 19, 2006, between the
OLB Group,
Inc. and Baker & Taylor Fulfillment, Inc.
|
|
|
10.3
|
Settlement
and Merger Agreement dated as September 27, 2004, between OLB.com
(on-Line
Business) and MetaSource Group, Inc.
|
|
|
11
|
Statement
re: Computation of per share earnings (1)
|
|
|
31.1
|
Rule
13a-14(a) Certification – Chief Executive Officer
*
|
|
|
31.2
|
Rule
13a-14(a) Certification – Interim Chief Financial Officer
*
|
|
|
32.1
|
Section
1350 Certification – Chief Executive Officer *
|
|
|
32.2
|
Section
1350 Certification – Interim Chief Financial Officer
*
|
(1)
Reference is made to Registrant’s Statements of Operations contained in the
Financial Statements included in this Report on Form 10-QSB.
*
Filed
herewith
-17-
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act
of
1934, the registrant has duly caused this report to be signed on its behalf
by
the undersigned, thereunto duly authorized.
|
|
THE
OLB GROUP, INC.
|
|
|
|
|
|
|
Date: July
25, 2008
|
By:
|
/s/ Ronny
Yakov
|
|
|
|
Ronny
Yakov
|
|
|
|
President,
Chief Executive Officer and Interim
Chief
Financial
Officer
|